Emitters in the Chinese city of Shenzhen may choose to relocate as the city introduces a cap-and-trade program to limit greenhouse gases.
Companies may go elsewhere as the cost of their carbon emissions cuts profitability, Ge Xing’an, vice president at the Shenzhen Emission Exchange, said yesterday at a conference in Hong Kong. Ge predicts the fallout from businesses leaving would be offset by new companies that can benefit as emitters try to reduce greenhouse gases linked to climate change.
Shenzhen is one of seven manufacturing areas in China scheduled to start pilot programs this year for carbon trading. Beijing, Shanghai, Guangdong, Tianjin, Chongqing and Hubei are the other participants in a network that Bloomberg New Energy Finance forecasts will regulate 800 million to 1 billion tons of emissions by 2015. That would be the world’s biggest cap-and-trade program after the one in Europe.
Shenzhen predicts more than 800 companies will participate in its emissions program when trading begins later this year. The city will meet the 2013 start-up deadline, Ge said.
Former Chinese leader Deng Xiaoping chose Shenzhen in the 1970s as one of the nation’s proving grounds for market capitalism. That transformed a county of 30,000 people north of Hong Kong into one of China’s largest cities. Shenzhen had a population of more than 11 million as of the 2010 census.